February 25, 2009

Texting To Give
Mobile fundraising not ringing off the hook

By Katrin Verclas

Mobile fundraising is taking off -- or so hopes the nonprofits looking for a new channel for people to give on the spot with a quick text message.

According to CTIA, the international association for wireless telecommunications, there are 270 million mobile subscribers in the United States, most with the ability to send text messages. Once considered a purview of the young, mobile subscribers between 35 and 54 are increasing their text messaging, according to ratings firm Nielsen. In 2007, just 37 percent regularly sent text-messages. It was up to 59 percent in 2008.

How does it work?

The most popular method of mobile fundraising is premium SMS, which stands for short message service. One example of such a campaign is Share Our Strength, the national organization focused on child hunger. It launched a text donation challenge a few months ago in partnership with AT&T. Donors made $5 contributions by texting “SHARE” to 20222, one of the special short codes used for fundraising. As an additional benefit, AT&T matched those $5 contributions up to $100,000.

When donors send a text to a specific five-digit short code, they receive an automatically-generated SMS in reply. The $5 donations are made when they confirm the donation with a simple reply text message. The $5 charge appears on their monthly bill, or is debited from their prepaid account balance.

Until recently, the high carrier fees -- up to 50 percent of a mobile donation -- were unacceptable to charities. But this has changed during the past two years. Mobile donation campaigns that go through the Mobile Giving Foundation are not subject to carrier fees. The Mobile Giving Foundation, a nonprofit clearinghouse that negotiated with the wireless providers to waive fees for approved organizations, charges 10 percent, for its overhead. As a result of this dramatic reduction in fees, mobile giving has attracted the attention of dozens of nonprofits, such as the Salvation Army and the ASPCA.

The Mobile Giving Foundation is the most obvious way. It currently operates 10 fundraising short codes that rotate between campaigns --nonprofits use unique keywords. Organizations apply to the Mobile Giving Foundation to qualify, and then work with an approved mobile vendor. The process isn’t quick. There’s a wait time for approval, and it can take up to 90 days for donations to be forwarded. Current industry regulations limit SMS donations to $5 per transaction.

Some of the most interesting campaigns use mobile fundraising to draw attention to their brands. The Salvation Army, for example, solicited mobile donations as part of its holiday kettle ringing campaign. UNICEF deployed a similar strategy, soliciting donations via SMS during its Trick-or-Treat for UNICEF Halloween campaign. Both campaigns sought to capitalize on the just-in-time giving mobiles enable.

There are also high-profile celebrity campaigns. The singer Alicia Keys, for example, aggressively marketed mobile giving for her charity, Keep a Child Alive. Keys appealed for mobile donations during a concert tour and now displays a mobile giving short code for a $5 donation on the charity’s Web site. According to Mobile Accord, the vendor for the campaign, 8,000 donors gave $5 via SMS during the concert tour, raising $40,000.

Stand Up for Kids, a nonprofit working to alleviate child and teen homelessness, teamed up with Virgin Mobile’s Generation RE campaign and American Eagle Outfitters. For each user who texts “Karma” to short code 68450, a piece of clothing is donated to a homeless child by American Eagle. Donors can also text their names to appear on the Stand Up for Kids Web site. The campaign appeals to a young audience, collects donations and builds a mobile list in the process.

Mobile phones are widespread in the U.S. and texting is growing among all age groups. That said, mobile giving is still a small field. In 2008, the first full year of mobile fundraising, only $500,000 was given via SMS. Not much, given the ubiquity of mobile phones in the U.S., and a tiny amount compared to the $306 billion reportedly donated in 2007.

The current $5 donation cap per text message limits SMS fundraising. Nonprofits also fear that small donations can cannibalize donors who might give more online. There is some effort to increase the premium SMS limit from $5 to $10, and to allow for recurring monthly donations. Donors would still have to approve each monthly SMS donation with a reply confirmation, but at that $120 annual level, mobile giving via SMS starts to look like a more lucrative option.

So far, many nonprofit campaigns have struggled integrating mobile campaigns into an overall strategy. Organizations also need to think about how to convert their mobile donors into longer-term supporters. Finally, donor still need to be educated -- most people do not yet know they can give via text messages.

But as the much-lauded campaign of now President Barack Obama showed, mobile messaging can be effective when deployed in a way that reinforces messages through other channels and takes into consideration what is uniquely valuable about communications via mobile phone.

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Katrin Verclas is the co-founder of MobileActive.org, a network of people from around the world using mobile technology for social impact. She is also a principal with Calder Strategies, an interactive media consulting firm. This column was provided by Idealware, which provides candid information to help nonprofits choose effective software. For more articles and reviews, go to www.idealware.org.

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This article is from NPT TechnoBuzz, a publication of The NonProfit Times.

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